Mexico's Slim buys stake in Telekom Austria

MEXICO CITY/VIENNA Tue Jun 5, 2012 3:32pm EDT

Austrian Telekom's company logo is pictured in front of their company headquarters in Vienna August 12, 2010. REUTERS/Herwig Prammer

Austrian Telekom's company logo is pictured in front of their company headquarters in Vienna August 12, 2010.

Credit: Reuters/Herwig Prammer

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MEXICO CITY/VIENNA (Reuters) - Mexico's Carlos Slim has purchased a 4.1 percent stake in Telekom Austria, in a new move into the European market by his mobile giant America Movil, which is already seeking a bigger share of Dutch telecom KPN.

Oscar Von Hauske, head of fixed operations at America Movil (AMXL.MX), on Tuesday confirmed a report in the Austrian media that the company had built up the 4.1 percent stake.

"It's been done through the market," he told Reuters. "Telekom Austria is a company that we have been looking at for some time," he added, declining further comment on the stake.

Telekom Austria shares shot up as much as 10 percent earlier on Tuesday after Austrian magazine News first reported the share purchase, adding that Slim and Telekom Austria shareholder Ronny Pecik were preparing to combine their stakes in the company.

Such a venture would give Slim and Pecik control of nearly 25 percent of Telekom Austria (TELA.VI), which has 23 million customers in eight countries in Central and Eastern Europe and annual revenues of over 4 billion euros ($5 billion).

Von Hauske, who spearheaded America Movil's expansion in Latin America, said he had not held personal talks with Pecik or his investment partner, Egyptian billionaire Naguib Sawiris.

Slim's America Movil made a move to expand in Europe's telecoms market with a bid last month to boost its 4.8 percent stake in Dutch group KPN (KPN.AS) to up to 28 percent, offering $3.25 billion, or 8 euros per share.

Telekom Austria shares closed up 4.3 percent at 7.57 euros, off an earlier high of 8 euros. The Stoxx Europe 600 telecoms sector index .SXKP closed down 0.4 percent. In Mexico, America Movil shares slipped 0.61 percent to 16.38 pesos.

THE AUSTRIAN MOVE

Last month another Austrian magazine, Format, reported that Slim was looking to take a stake in Telekom Austria and had already had talks with its two biggest investor groups, Pecik and Austrian state holding company OeIAG. [ID:nL5E8GIGVN]

Pecik has said he holds 21 percent of Telekom Austria, in an investment vehicle which is backed by Sawiris. Pecik said last month, when he was elected to the company's supervisory board, that he was content with that holding.

Pecik has been otherwise tight-lipped about his plans. Telekom Austria declined to comment, while OeIAG, Telekom's biggest investor with a 28.4 percent stake, said it did not comment on "market rumors".

News said Pecik's plan to join up with Slim - via a vehicle with the working name Amov in which Slim's America Movil would hold 80 percent and Pecik's RPR foundation 20 percent - had tripped up Sawiris, who had been eyeing Norway's Telenor (TEL.OL) as a potential buyer for their stake.

It said law firm Wolf Theiss had helped put the deal together. Sawiris declined to comment on the report, saying: "You will have to ask Mr Pecik."

Pecik and Sawiris spent 800 million euros building their stake, Pecik said last month. News magazine said Pecik would now sell his holding of some 93 million shares to the new vehicle for 9.50 euros each, or nearly 900 million euros.

According to News, the Austrian government has welcomed the idea of getting a Pecik-Slim combination as a stable core shareholder in Telekom Austria, which lost money after restructuring charges last year and which has been shaken by corruption scandals.

The partners had already signaled they would keep Vienna as Telekom's headquarters and preserve jobs, the weekly said.

"Slim is seen as Telekom's savior who ends all the speculation (about the group) and strengthens Telekom Austria as a leading company," it cited an "insider" as saying.

The company has forecast revenue this year to be flat at around 4.4 billion euros with underlying core profit to be down at 1.5 billion euros from 1.53 billion last year.

OeIAG head Markus Beyrer, who is also Telekom Austria's chairman, told shareholders last month that the state stake could be sold only if the government changed course and authorized such a transaction, which was not expected.

(Reporting by Cyntia Barrera in Mexico City, Angelika Gruber in Vienna and Ludwig Burger in Frankfurt; additional reporting by Georgina Prodhan in London; Editing by Erica Billingham, Greg Mahlich and Phil Berlowitz)

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